Bank of Japan Governor Kuroda: Must maintain low rates for long period

Author: Eamonn Sheridan | Category: Central Banks

BOJ Gov with a flurry of remarks 

  • Must maintain low rates for long period to meet price target
  • many central banks facing challenge of achieving price targets with less scope for policy response
  • BOJ board members agreed at last month's meeting that economic, price uncertainties are high, will take time to hit price target
  • BOJ's current forward guidance is framework in which BOJ will decide policy based on data, information available at the time
  • BOJ projects economic, price developments to warrant current low rates at least until spring 2020
  • There is good chance BOJ will keep current low rates beyond spring 2020 if conditions warrant
  • Chinese economy continues to expand firmly but weak signs broadening due to trade friction, it sector adjustment
  • Japan exports declining, leading to weakening of output, manufacturers' sentiment
  • Weakness in overseas economy yet to spread to Japan's domestic demand
  • Japan's economy has become more resilient to external shocks
  • BOJ does not expect overseas economy to worsen further
  • BOJ must scrutinise without pre-conception risks to its view that overseas economy will recover later this year, underpin exports
  • Japan firms may become more cautious on capex if overseas growth takes longer than expected to pick up
  • Japan's economy sustaining momentum for inflation to reach 2 pct



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